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August 16, 2021
One of the most important aspects of dealing with a vehicle purchase is knowing the associated taxes. That includes the state sales tax that is required in your state.
While in some states, the sales tax can be low, while in other states, the sales tax can add thousands of dollars to the cost of the vehicle.
Here, we’ll look at the tax rate for new and used vehicles within the Empire state.
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The car sales tax in New York is 4% of the purchase price of the vehicle.
For instance, if you pay $40,000 for a new vehicle, the state sales tax will be $1,600. Note that this state sales tax does not include any county or city tax that may be applied on top of the state sales tax.
You can calculate the state sales tax on a vehicle purchase by first taking the vehicle's purchase price and then deducting any trade-ins.
This will be a portion of your out-the-door costs. From there, you can multiply this cost by 4.5%.
Calculate Car Sales Tax in New York Example:
- Let’s say you purchase a new vehicle for $50,000.
- Your trade-in vehicle is worth $7,500 and you get a $2,500 rebate.
- That puts your out-of-pocket cost at $40,000.
- However, in New York, the taxable amount is $42,500 (rebate is taxed)
- Now multiple $42,500 by 4%.
- This gives you a state sales tax of $1,700.
Yes. The 4% state sales tax applies to both new vehicles as well as used vehicle purchases.
New York City has the highest city sales tax in New York, with a tax rate of 8.875%. That is an additional 4.875% in city tax on top of the statewide 4%.
Oneida County has the lowest county sales tax in New York, with a rate of 4.75%.
The value of your trade-in is not subject to state sales tax. Therefore, you can lower your overall tax burden if you include a trade as part of the sale of your vehicle.
For instance, let’s say that you purchase a new vehicle for $50,000, and you get a $10,000 trade-in credit. Then you will only be taxed at $40,000.
Private sales are also subject to the 4% state sales tax. Once you have purchased the vehicle from a private party, you are responsible for paying the state sales tax to the New York State DMV.
In the state of New York, you are only taxed on the out-of-pocket cost of the vehicle. However, this does not include any dealer rebates or manufacturer incentives.
Let’s say that you purchase a vehicle for $50,000 and get a $2,500 rebate after your purchase. That $2,500 will be subject to the 4% state sales tax. So the total taxable amount is still $50,000.
Here’s a look at other taxes and fees that you will have to pay whether you are purchasing a new or used vehicle in the state of New York.
Whether you are purchasing the vehicle from a dealership or a private party, you will have to pay DMW/State fees. In the state of New York, the DMV/state fees are the following:
Also, you can be subject to what is known as the MCTD fee or the Metropolitan Commuter Transportation Fee if you live in the following 12 counties:
Note that if you are transferring your plates and registration from another vehicle, then you do not have to pay the MCTD fee. This fee only applies to vehicles that you have not previously registered.
When you purchase a vehicle at a dealership, the dealership will handle the documentation work on your behalf. The average “Doc Fee” in New York is a relatively low $75 per sale.
However, you have to be aware that dealerships may charge their own “in-house” fees on top of this. Additional fees include advertising fees and destination fees.
While the documentation fees are non-negotiable, you may be able to get out of the advertising and delivery fees.
There are several exemptions available that will allow you to avoid paying state sales tax:
In New York, you can get a rebate of up to $2,000 if you purchase a plug-in hybrid or all-electric vehicle. Currently, the state of New York recognizes 60 vehicle models that qualify for the $2,000 EV vehicle rebate. Check out all EV tax and utility incentives here.
Tax information and rates are subject to change, please be sure to verify with your local DMV.
The state sales tax on vehicles purchased in New York is 4%.
Yes. Used vehicles are subject to the 4% state sales tax.
Oneida County has the lowest sales tax at 4.5%.
New York City has the highest sales tax at 8.875%.
If you are gifted a vehicle from a member of your family, then you don’t have to pay state sales tax.
The registration fee in the state of New York is $50.00.
Yes. The trade-in value of your vehicle will reduce the sales tax on the new or used vehicle that you purchased.
You can avoid paying sales tax in New York by purchasing your vehicle out-of-state, having your vehicle gifted to you by a family member, or by not being a resident of the state of New York when you purchased your vehicle. However, be aware that while you may avoid paying sales tax in New York, these methods of purchase or acquiring a vehicle may be subject to other fees.
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Posted in Car Buying Tips, Car Calculators |
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